It is rather interesting that stock market analysts are at their most bullish on Reliance Industries in the last 7 years since January 2016. That was the time the Jio launch was being planned. The stock has been a smart gainer since then. In 2023, the stock is down 3% while the Nifty is up 1.5% due to a sharp fall in the crude prices. Incidentally, 33 out of the 38 analysts covering Reliance have buy ratings, with many of these analysts optimistic over valuations. Analysts are bullish on oil, retail, telecom, and Jio Financial demerger.
Apollo Tyres reported 4-fold growth in Q4FY23 net profits at Rs427 crore on lower rubber costs and strong domestic auto sales. Other tyre companies like Ceat and MRF also benefited in this quarter. The company also hiked prices which boosted margins. Revenues from operations were up 12% at Rs6.247 crore. Sales in the Asia Pacific, Middle East, and Africa (APMEA), the company’s biggest segment, increased nearly 10% on the back of robust auto sales in this region. Apollo also recommended a final dividend of Rs4 per share.
Byju’s, India’s most valuable edtech company, is all set to raise $1 billion funding through a mix of equity and structured instruments. The fund raising is expected to happen at valuations of $22 billion. This will be a big boost amidst the ED and FEMA scrutiny that the company is going through. It is estimated that nearly $700 million out of $1 will be raised through equity, and the GCC based sovereign funds are likely to be among the investors. The balance will be raised via structured instruments through Oaktree Capital.
Lupin Ltd posted 12% higher sales for Q4FY23 while the bottom line turned around from loss to profit on yoy basis. The revenue growth was driven by strong API (active pharma ingredients) business performance along with US and domestic market sales growth. For FY23, Lupin reported flat sales of Rs16,270 crore, while full year PAT came in at Rs448 crore. In FY22, Lupin had reported a net loss due to litigation and settlement expenses of the Glumetza (diabetes drug) plus impairment expense of Rs708 crore for Solosec.
Mankind Pharma had a stellar listing on the bourse on Tuesday despite the markets closing flat. The stock opened 20.4% higher and then added another 10% from the opening price to close at the upper circuit. Against the issue price of Rs1,080, the stock closed at Rs1,430 on listing day. While the opening price was the low point of the day, the stock closed at the high point of the day. There was heavy buying from HNIs and QIBs. Even retail investors who had missed out buying, jumped int the fray. Deliveries were over 58%.
Go First case is gathering heat. Even as Go First awaits the NCLT verdict on its voluntary insolvency plea, lessors have sought to deregister 9 more aircraft of Go First to recover their lessor dues. Lessors have already approached the DGCA for repossession of 45 aircraft of Go First. Of course, NCLT is yet to pass its final order on the Go First petition. Go First had stopped flying from May 03rd while DGCA has directed them to stop sale of tickets till further orders. Past experience has been that this is normally the end game.
NCLT Chandigarh bench withheld the merger of Embassy Group’s residential and commercial projects with Indiabulls Real Estate (IBREL). The latter is yet to decide on the next course of action and this could include filing an appeal against the order of the NCLT. In 2020, Embassy Group entered into a definitive agreement to merge certain residential and commercial projects with IBREL in a cashless scheme, such that Embassy group becomes the promoter of the merged unit. NCLT Bengaluru has sanctioned this deal.
There seems to be some hope in the performance of mid cap IT companies like Persistent Systems, Cyient and LTI-Mindtree in the March 2023 quarter, even as large cap IT companies saw pressure. Three out of the five large-cap IT companies saw lower revenues in the quarter. However, mid-cap IT companies have been focusing on client acquisition and increasing deal size. However, rise in employee cost and supply-side constraints remain headwinds. That is why analysts expect mid-cap IT story to be ephemeral, at best.